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Attorneys respond to bankruptcy trustee request for passwords

South Carolina consumers who file for bankruptcy need to provide information about finances, but bankruptcy lawyers say that trustees in another state are overstepping with some requests. Two Maryland trustees are asking debtors to disclose login information for their Amazon Prime, eBay and PayPal accounts. The debtors are also required to leave the accounts open and cannot change their passwords for at least 10 days.

While the aim with providing financial information on filing a bankruptcy is for trustees to gather as much information at the outset as possible so they do not have to delay the process by asking for further details, bankruptcy attorneys say there are better and less intrusive ways of handling these accounts. One is by asking for statements. Debtors could be required to disclose any information about these accounts and whether there is a balance on them in the initial bankruptcy paperwork. Instead, the trustees have made a request that may discourage debtors from filing for bankruptcy. One attorney says that in response, bankruptcy attorneys may simply advise their clients to shut the accounts down before filing.

Attorneys say that trustees have the right to dig further into a debtor's finances as needed. However, there is no basis on which they need to request information like online passwords up front.

People who are struggling with debt may be discouraged from filing for bankruptcy for other reasons as well. For example, people may think that under a Chapter 7 bankruptcy, they have to give up all their assets. However, some assets may be declared exempt even with a Chapter 7 bankruptcy. A person who has questions about this or aspects of filing for bankruptcy might want to discuss these concerns with an attorney who can review the options for debt relief.

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